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EUR/USD Daily Forecast – Back Above The 20 EMA

Vladimir Zernov
·3 mins read

EUR/USD Video 18.09.20.

Euro Gains Upside Momentum Ahead Of The Weekend

EUR/USD managed to get back above the 20 EMA at 1.1840 and tries to gain additional upside momentum as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has returned back below the 20 EMA at 93.05 and is testing the nearest support at 92.80.

Yesterday, the U.S. reported that Initial Jobless Claims declined from 893,000 (revised from 884,000) to 860,000. It looks like Initial Jobless Claims are starting to stabilize at an elevated level, increasing concerns about the current pace of economic recovery.

At the same time, Continuing Jobless Claims report painted a more optimistic picture as Continuing Jobless Claims declined from 13.5 million (revised from 13.4 million) to 12.6 million.

The U.S. housing market showed signs of a slowdown as Housing Starts decreased by 5.1% month-over-month while Building Permits declined by 0.9%.

Meanwhile, EU provided inflation numbers for August. Inflation Rate was -0.4% month-over-month. On a year-over-year basis, Inflation Rate was -0.2%. Core Inflation Rate increased by 0.4% year-over-year. All numbers were fully in line with the analyst consensus and highlighted the continued price weakness in the eurozone.

Technical Analysis

 

EUR/USD is currently trying to settle above the 20 EMA at 1.1840. If this attempt is successful, EUR/USD will gain additional upside momentum and head towards the nearest resistance level at 1.1910.

This level has been tested several times in September, and each time EUR/USD faced significant resistance. If EUR/USD manages to settle above this resistance level, it will head towards the next resistance at 1.1965.

A move above 1.1965 will open the way to the test of September highs at the psychologically important level at 1.2000. Most likely, such move will require additional upside catalysts.

On the support side, the 20 EMA may serve as the nearest support level for EUR/USD. A move below the 20 EMA will open the way to the test of the major support level at 1.1765.

Yesterday, EUR/USD made an attempt to settle below 1.1765 but received strong support near this level. A move below 1.1765 will provide EUR/USD with an opportunity to test the next support level at 1.1715.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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